Investing in Dividends Paying Companies – A Complete Guide to What You Need to Start

Listed below are the main things you need to know and prepare to start investing in the stock market for dividend income to achieve financial freedom.

1. Money

You need money to invest in stocks. The question of how much investment you will put on the stock market largely depends on you and your savings as well. You don’t have to put all your money into the venture. Be reminded that although stock investing is profitable. Before deciding how much money you can invest, you need to do some calculations.

Prior to investing, it’s best to make sure your finances are secure. Though, there are great opportunities to profit through investing for dividend income, the stock market may not be suitable for you. If you have too many monthly bills or too much debt, you must wait before you start to invest in the stock market. As the market will always move up and down, it is better to pay down your debt, especially credit card debts. Once you have a positive monthly cash flow and six to twelve months emergency funds, you can to invest your money in the dividend paying stocks. You will be on your financial freedom.

To calculate cash available for investing

1.1. List all of your liquid (cash-like) assets: cash deposits in bank accounts, stocks, bonds, etc.

1.2. Add your monthly income including interest (average one year’s by dividing the amount by twelve) you will receive over the year the year.

1.3. Add your monthly cash outflows; this includes monthly expenses and any loan repayments you need to make. Average your yearly payments such as insurance and children’s’ school fees (if any) by dividing this amount by twelve.

1.4. Take step 2 and deduct step 3. If you have a negative cash flow, then you will to make a budget to control your cash out flow and strictly follow this to save money for investments. If the amount is positive, then you are ready to start investing. Remember, you must save some amount for emergency expenses.
Congratulations, you are ready to start in dividend paying companies to achieve financial freedom.

2. Investment Goals

After you have saved money for emergency funds, must set a target you want to achieve from your investments. This target will be achieved through income from dividends and reinvesting the dividends. You must have a long term perspective for your portfolio. Long term is at least 3 years or longer. Why 3 years or longer? Because, only in the long run will the dividend compound enough to make sense for long term investing. Also, if the company keeps in paying dividend and increasing the dividend amount over time, then capital gain is very likely.

3. Investment strategy

As investing in dividend paying companies is the easiest strategy, you must develop a plan on how to invest for dividends. Remember that market ups and downs can cause you to doubt your strategy. You must be confident of your strategy and continue investing. You must have researched your choice of companies to invest stocks. You must have a strategy on when to buy and sell.

4. Researching the Right Companies for Dividend Income

You’ll need to focus on investing in companies which pay dividends consistently. Look for companies which have consistently performed well over the past several years. Of importance are companies who did not cut dividends, even better if they increased dividends during the economic downturn. These companies have long-term potential to help you achieve financial freedom through income from dividends. Of more importance is whether these companies can continue their fantastic performance, is their business model long lasting? You must also check if the management is investing more into their own company. If they are, then these are a sign that the management is behaving like owners and are sure of the long term prospects of the company. If management is sure of the company, then you dividends are likely to continue for a long time. Long term dividends leads to financial freedom and you do not to keep buying and selling stocks.

5. Diversification

Diversifying your investments is extremely important. You can diversify your investment in many different types of assets, such as real estate for rent, dividend income investing and bonds to name a few. The easiest investment is in dividend paying companies in the stock market as the market is very liquid and information is easily available for you to analyze. Even while investing in dividend paying companies you must diversify your portfolio. This helps to protect your capital.

6. What’s your risk tolerance level?

You must understand your. You must know your risk tolerance level. Investing has many upturns and downturn. If you lose sleep after investing any money, then your risk tolerance is very low. That is exactly the reason you must invest in dividend paying companies as dividends help you to earn income during upturns and downturns of the market. You will be able to sleep well.

7. Educate yourself

It is extremely important you educate yourself regarding investing in dividend paying companies. You can take seminars or read books by various gurus to learn from the masters or invest in online courses. You must also read business newspapers and magazines regularly. Educating yourself will help you believe in the choices you make and this will lead you to make investment decisions. Once you are educated you do not have listen to others. You will achieve financial freedom on your own.

8. Broker

A stock broker is required to help you buy and sell stocks. Choose a broker wisely so that you can maximize your investing profits. Different brokers have different charges for helping you to buy and sell stocks on the exchange. There are full service brokers who for those who need more details before investing. Discount brokers charge cheaper rates; however, they do not give any advice. After you learn how to invest and are confident in choosing the right dividend paying companies, the wiser choice will be to use discount brokers enabling you to save money, thereby giving more money to invest for your financial freedom.

In conclusion, investing for dividends is a long term process. Getting dividends and reinvesting dividends will make you financially free. Instant wealth is not part of this process. Any person who has got instant wealth will normally lose the wealth as they do not know what to do with the wealth. Very few people become multi millionaires from the stock market, if it was easy very body in this world would be a multimillionaire. The idea of investing the stock market for income from dividends is to become financially free so you can live the life you desire.

Technology For Your Small Business Toolbox

Technology is evolving quickly with new gadgets, gizmos, and what-nots coming out everyday. It can be a little overwhelming for small and home based business owners trying to figure out if they need it, want it, can use it, should have it, will help them. The most important factor in making a decision about integrating technology into your business, and life, is whether or not it is going to help you. Period. You have to ask yourself, “Is this thing going to help me be more efficient? Will it help me to better serve my customers?” Technology is essentially a tool, like a shovel or hammer. These things should help you do things easier, better and more efficiently. With that in mind, here are a few technologies that you should consider for your toolbox.

Contact Management

Regardless of the fact that much of our daily business is now done online, through email, virtual fax, and over the phone, and possibly because of this, it is more important than ever to maintain good relationships with your customers. The relationships you build with your customers are what will keep them coming back to you. If you have any sort of customer base you may think there is no way you could possibly build a meaningful relationship with all of them. This is where a contact manager comes in. There are a lot of different contact manager programs to choose from. Regardless of which one you choose, it is going to help you keep track of all of your customers. It will help you quickly recall important information about each person, keep track of communications you have had with them, and easily find the people that you have not contacted recently. A contact manager is also going to help you stay on top of your deadlines and remind you of appointments, conference calls or any other time sensitive details in your life. So now ask yourself, “Will a contact manager make me more efficient and help me to better serve my customers?”

Automated Communications

A common complaint among consumers is that once they do business with a company, they never hear from them again. So how do you make sure to stay in contact with all of your customers? One way is with auto responders. An auto responder is going to allow you to schedule regular emails to go out to your customers at pre-determined times. The subject of the emails will vary depending on your specific business. It may be just a note checking in to make sure everything is working out well with the product or service they purchased. Or, perhaps it introduces an additional product or service that might be of interest of them. Maybe some tips about how to get the most out of the product or service that they bought from you. Another automated way to communicate with your customers is a newsletter. Write one newsletter and you keep in touch with all of your customers at once. There are a number of newsletter software and templates out there. Some are free while others charge per number of subscribers. Your newsletter can be weekly, monthly, bi-monthly or even quarterly. The important thing to remember with a newsletter is that the information needs to be relevant to your customers. It should not be about you and your company so much as it should be about your customers. Figure out what they need or want to know and give it to them. So now is the time when you ask yourself, “Will auto responders and newsletters make me more efficient and help me to better serve my customers?”

Advanced Telecommunications

In this day and age there is no reason that any business should be using a local number with a standard voice mailbox attached to it for their telephone line. There are options available now that can unify our many sources of communications while giving small and home based businesses a boost to their image at the same time. Take a virtual PBX for example. A virtual PBX is basically the same kind of phone system that a large Fortune 500 company would use, without all the hardware, software, maintenance and expense. Technology has made it possible for small and home based businesses to have a toll free number, automated attendant that answers each call, multiple voice mailboxes, have their calls forwarded to them on any land line they like and have all their voice and fax messages be delivered to one place, be it to an email address or an online web interface. A virtual PBX can accomplish a number of things for a small or home based business owner. One, it unifies their communications with just one number for both voice and fax. Two, it allows business owners to have one place to check messages whether they are voice, fax or email. Three, it helps business owners stay connected with their customers. Four, it helps the business to establish itself in the eyes of their customers as being an efficient, organized and professional company. So now, ask yourself, “Will a virtual PBX make me more efficient and help me to better serve my customers?”

It can be difficult to not get overwhelmed by all the technologies being marketed to small and home based business owners today. Not every one will be right for your business. Look at each technology individually and evaluate whether it is something that will increase your efficiency and enhance your ability to help your customers before deciding if you should add to your toolbox.

Commercialisation Of Technology Key Issues To Remember

1) Universities or other private and public institutions regularly undertake research on various areas. Very often the research has as its ultimate goal commercialization, profit-making and winning competition. Research may be commercialised in two ways: (i) New companies are created which are provided with access to the intellectual property rights (IPR), facilities or assets of one party; (ii) Technology may be made available to existing companies. Typically, this would involve the commercial licensing of research work directly to industry, for example, to large pharmaceutical or medical companies.

2) For a collaboration to take place there needs to be an agreement between the parties in place clearly setting out the contributions of each party and of course the rewards should the technology be proved successful. This is achieved by entering into a Technology Transfer Agreement, which addresses the following:

1. Nature of the IPR involved/transferred
Define exactly what rights are to be transferred.

2. Method of the transfer
The next most fundamental issue to be resolved is the method by which the IPR will be transferred from one or more parties, that is, by assignment or licence.

a. Assignment
An outright assignment gives the assignee greater freedom in relation to the technology, since in a typical assignment, there are few, if any, controls placed on the assignee by the assignor. In the event of insolvency, the assignee has an asset that can be sold to create value for the shareholders. Of course, if the assignee has become insolvent it may be because there is no market for the product. However, if the product has failed for other reasons, such as lack of marketing support, lack of follow-on funding, or issues affecting customers a willing buyer may exist for the technology. The practical benefit is that it should be easier (or cheaper) to raise funds if the assignee has some form of assets. Investors usually prefer to invest in a company which owns and has freedom to use all of its assets. If an outright assignment is not possible, this can also be achieved with an exclusive licence.

b. Licences
A licence gives the parties a greater feeling of control and also an ability to participate in any successful commercialisation of the technology through royalty streams, as well as being able to participate in any growth of the spin-out business as a shareholder. A licence also ensures greater flexibility for the party; it may be possible to provide that the licence terminates if certain conditions are fulfilled (for example, if the licensee fails to exploit or to exploit successfully the transferred technology). The licensor then has the option to take back the licence and perhaps proceed with a new licensee.

A compromise worth considering is a licence with an assignment trigger built in. The trigger can be linked to the value of the licensee, the return to the licensor(s), or to some other factor. In this way the licensor(s) are protected at a time when the spin-out is most vulnerable and, from the licensee’s point of view, should it succeed, it is very likely that it will end up owning the technology outright.

In other scenarios, the licensee can be expected to agree to certain performance criteria. These will often be linked to the number of sales or revenue generated from sales or other commercial exploitation of the licensed technology. Failure to meet the criteria will see the licence come to an end or for the licence to become non-exclusive instead.

3. Consideration
The consideration for the transfer of technology can be made up of equity, up-front payments, royalties, or a mixture of all three. This tends to be an area which is most heavily influenced by policies adopted from time to time by the various parties to the agreement. Other factors may affect the value, for example, where one or more of the contributors to the technology was not an employee, but for example, a post-graduate student or consultant. In fact, a post-graduate student will generally fall outside the definition of “employee” under the Copyright, Designs and Patents Act 1988, and so the IPR may not belong to the university.

4. Other rights and obligations
Whatever the nature of the IPR transfer, the parties need to agree what continuing rights (if any) the parties will have to use the IPR. If a party is a university it is generally agreed that the university can continue to carry out non-commercial research and teaching using the transferred technology. However, it is worth investigating whether there are existing research projects, such as PhD theses, which need to be completed. If so, specific rights should be carved out of the transfer agreement as necessary to ensure that these projects can be completed. Also it is important to have a clear agreement as to which party will bear and be responsible for: (i) any prosecution and other protection of the transferred rights costs (for example prosecution of patent applications so that they become patents granted!) and (ii) any regulatory licences and approvals.

5. IPR Infringements
The key question to be addressed is which party will have primary responsibility for dealing with any IPR infringement of the transferred technology. It is important for the spin-out company/licensee to ensure that it has the appropriate rights to take action against a third party which is infringing the transferred technology in some way.